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FPL says advance nuclear fee has saved money for customers

Florida's largest utility pushed back this week against critics of a law that allows power companies to charge customers in advance for new nuclear plants, saying the law "should be celebrated."

Eric Silagy, president of Florida Power & Light, said he opposes any repeal of the Nuclear Cost Recovery Clause, or so-called advance fee, because it has helped increase power at existing FPL nuclear plants and is enabling construction of two new reactors.

"The project is already saving our customers millions of dollars on fuel every month and will save billions over its operational lifetime," FPL spokesman Mark Bubriski told the Tampa Bay Times about the improvements already made to existing nuclear plants.

That's the good news.

But the law also has enabled the two largest investor-owned utilities, FPL and Duke Energy, to collect billions of dollars for nuclear projects that might never produce any electricity. And while FPL was successful with nuclear projects that used the advance fee, it still incurred more than $1 billion in cost overruns.

Concern about the law has prompted House Speaker Will Weatherford and Senate President Don Gaetz to consider changing it.

Rep. Mike Fasano, R-New Port Richey, and Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, want to repeal the advance fee law because they say it is an unfair tax on utility customers for nuclear projects that the power companies have no obligation to build.

"It is absolutely unfair," Fasano said.

Fasano has tried for years to repeal the law but could never get a hearing on his bill. Things changed, he said, after the Times reported about more than $1 billion of customer money that Duke subsidiary Progress Energy Florida has spent on its proposed $24 billion Levy County nuclear plant without a final decision on whether it will build the project.

The law, passed in 2006 to hasten construction of new nuclear power plants, includes a clause that allows the utilities to pocket a portion of the money they collect in advance for the fee.

The state Public Service Commission and the Office of Public Counsel, which represents consumers, said the Levy costs have reached $1.5 billion. And Duke gets to keep more than $150 million of that money whether it completes the project or not.

In addition, Duke has spent $457 million through the advance fee law to increase power at the broken Crystal River nuclear plant, which analysts predict will soon close permanently.

In the case of FPL, the utility has spent between $2.95 billion and $3.15 billion adding 500 megawatts of power — half the size of a full nuclear plant — at its Turkey Point nuclear power station. The utility originally estimated that the project would cost $1.8 billion for 400 megawatts.

Weatherford told the Times editorial board Friday that his energy committee is reviewing the law with the recognition that some kinds of changes are needed. He said he was in the room when legislators and utility representatives developed the concept of the law.

"Everybody thought this was a brilliant idea," Weatherford said, including environmental groups. "I think we've all woken up and realized mistakes were made."

Ivan Penn can be reached at or (727) 892-2332.

FPL says advance nuclear fee has saved money for customers 02/01/13 [Last modified: Friday, February 1, 2013 10:05pm]
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